CTM41275 - Particular bodies: Trade unions: Provident benefits - method of allowing relief

Relief for provident benefits can be given on:

• income and chargeable gains which are otherwise liable to CT (CG10741),
• franked investment income (prior to 6 April 1999).

If, prior to 6 April 1999, the union has both franked and unfranked sources of income, give relief on the one that gives the union most advantage. If a union does not have enough relief to cover both, it should be set off against unfranked income first.

Give relief according to the income and expenditure in the accounting period. This is covered in CTM41260.

When relief is set off against income or capital gains liable for CT, only assess the amount that exceeds the provident benefits.

Where, prior to 6 April 1999, benefits are set off against franked income the union should be paid the tax credit included in it. Where there had been a change in the rate of ACT during an accounting period, give relief first of all against amounts of franked income with the highest rate of credit.